DAC8 Transposition in Denmark: Compliance Roadmap

Denmark has taken a distinctly pragmatic approach to crypto-asset regulation and taxation. The Danish Tax Agency (Skattestyrelsen) has been among the most active in Europe in pursuing crypto-related tax compliance, using third-party data and international cooperation to identify undeclared crypto income.

Regulatory Context

The Danish Financial Supervisory Authority (Finanstilsynet) oversees CASPs operating in Denmark under the country's AML framework. Denmark's regulatory approach emphasizes consumer protection and market integrity, with CASPs required to register and maintain robust compliance programs.

Denmark's broader financial regulatory environment is characterized by high transparency standards and close cooperation between the Finanstilsynet and the Skattestyrelsen on matters related to tax compliance in the financial sector.

Tax Treatment

Denmark taxes crypto-asset gains as personal income (personlig indkomst) at progressive rates that can reach up to approximately 52% at the highest marginal rate. This is among the highest effective tax rates on crypto gains in the EU, making the Skattestyrelsen particularly motivated to ensure compliance.

The Skattestyrelsen has previously obtained transaction data directly from major international crypto exchanges through legal requests and international cooperation agreements. This proactive approach means that Danish taxpayers are already subject to significant oversight regarding their crypto activities.

Transposition Details

The Ministry of Taxation (Skatteministeriet) leads the transposition of DAC8 into Danish law. Implementation will likely take the form of amendments to the Tax Control Act (Skattekontrolloven) and the International Tax Reporting Act.

The Skattestyrelsen will serve as the competent authority, building on its existing role in CRS and FATCA reporting. Denmark's well-established digital infrastructure for tax administration provides a strong foundation for DAC8 implementation.

Danish TIN System

Denmark uses the CPR-nummer (Central Person Register number) as the TIN for individuals. This 10-digit number is assigned to all persons registered in Denmark. For entities, the CVR-nummer (Central Business Register number) serves as the identifier.

Both numbers are deeply integrated into Denmark's digital government infrastructure and are routinely collected by financial service providers.

Expected Penalties

Denmark's penalty framework includes fines for negligent non-compliance with reporting obligations, increased penalties for intentional violations, and potential criminal prosecution under the Tax Criminal Act (Straffeloven) for serious offenses.

Given the Skattestyrelsen's history of actively pursuing crypto-tax compliance, enforcement of DAC8 obligations is expected to be thorough and consistent.

Unique Considerations

Denmark's high tax rates on crypto gains create strong incentives for tax evasion, which in turn makes DAC8 data particularly valuable for enforcement purposes. The Skattestyrelsen has publicly stated its intention to use all available data sources, including international information exchange, to ensure full compliance.

CASPs operating in Denmark should expect detailed technical guidance from the Skattestyrelsen and should prepare for a reporting environment where data quality and completeness are prioritized.

Conclusion

Denmark's combination of high crypto-tax rates, a proactive tax authority, and advanced digital infrastructure makes it a jurisdiction where DAC8 compliance is both critical and well-supported. CASPs should prepare for rigorous enforcement and invest in high-quality data collection and reporting systems.